Business

Lasco ceases distribution for some Unilever products

LASCO Distributors Ltd has announced the discontinuation of its distribution arrangement for the Unilever cold storage and dry food portfolio effective today.

The company, which entered a contract to distribute more than 400 brands carried by Unilever, has decided to consolidate the portfolio offerings and focus on the distribution of the Unilever Home and Personal Care range of products.

Lasco said the move is in line with its continued drive to improve efficiencies and reduce overall operating costs. It means the company will no longer distribute brands including Blue Band, Flora, Red Rose Tea, Lipton, and Breyers ice cream.

“Lasco and Unilever made the decision to consolidate operations respectively in order to reduce costs and improve logistics. This was a strategic decision based on determining the best product mix for the company,” managing director, Lasco Distributors, Peter Mark Chin said in a release from the comany.

Unilever is the world's biggest ice cream manufacturer with an annual turnover of €5 billion. With the exception of its US brands Popsicle, Klondike, Talenti gelato, Breyers and Ben & Jerry's, the bulk of the company's ice cream business falls under its “Heartbrand” brand umbrella.

It is understood that the food portfolio represents 28 per cent of Unilever's global business. For Lasco Distributors in Jamaica, however, Unilever accounted for approximately one per cent of its operation.

Lasco recently completed a 100,000-square-foot warehouse expansion project valued at $725 million at its White Marl facility and made several upgrades to its IT platform consistent with overall drive to improve efficiencies and service delivery.

Headquartered on Red Hills Road, St Andrew, for just under three decades Lasco has been revolutionising business in Jamaica through its three companies — Lasco Distributors Ltd (founded in 1988), Lasco Manufacturing Ltd (1994), and Lasco Financial Services (2004).

All three companies were listed on the Jamaica Stock Exchange (JSE) on October 12, 2010, represented as LASD, LASM, LASF, and were largely successful.

For the financial year ending 31st March 2017, Lasco Distributors Ltd grew revenues by $1.25 billion to $15.8 billion, a growth rate of 8.6 per cent over prior year. Gross profit for the year grew to $2.9 billion, or 10 per cent more than the prior year. Net profit was $609.7 million, a reduction of 14.9 per cent compared to the previous year.

While the top line grew positively, Lasco's performance was affected by a number of one-off expenses. It included new product introductions, logistic costs associated with its White Marl expansion and professional fees relating to the Pfizer case.

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